Our long-term goal is to understand the molecular and biochemical mechanisms of RNA interference (RNAi), a conserved post-transcriptional gene-silencing mechanism mediated by microRNA (miRNA) and small interfering RNA (siRNA). These tiny regulatory RNAs play critical roles in many fundamental biological processes. In particular, misregulation of miRNAs has recently been linked to human diseases, such as cancer. Moreover, RNAi has been widely used as a powerful gene-silencing tool to perform functional genomic studies in multiple model systems. The specificity and potency of RNAi highlight its potential for developing novel and efficient therapeutic avenues to treat human diseases. We have previously identified two Dicer complexes, DCR-1/R3D1 and DCR-2/R2D2, as the respective miRNA- and siRNA-generating enzymes in Drosophila. In addition, the DCR-2/R2D2 complex binds nascent siRNA and facilitates its incorporation into the siRNA-induced silencing complex (siRISC). Based on these studies, the goal of this proposal is to address several outstanding questions in the Drosophila RNAi pathway with an emphasis on the miRNA pathway. We will investigate the inherent specificity and mechanism of miRNA biogenesis (Aim 1). We will test our hypothesis that the DCR-1/R3D1 complex senses asymmetry of miRNA and facilitates miRNA loading onto its effector complex, miRISC (Aim 2). Finally, we will develop a reconstitution assay to explore the mechanism of miRISC assembly and to identify and characterize new components of miRISC assembly (Aim 3). These studies will significantly advance our understanding of the Drosophila RNAi pathway. The origins of human diseases, such as cancer, can be generally attributed to loss-of-function of important genes (tumor suppressor genes) and/or gain-of-function of pathological genes (oncogenes). For unknown reasons, RNAi in human cells is less efficient than RNAi in Drosophila cells. Thus, comparison of the Drosophila and human systems will allow us to identify the underlying differences and, hopefully, to optimize RNAi in human cells. This could lead to the development of novel and efficient small RNAs-based gene-silencing methods to cure human diseases by specifically shutting down pathological genes.